UK Landlord Forum / Life

Hi Folks,

Firstly advance thanks for a great resource, enormously helpful, we are onto property no. 2 and this website has been hugely entertaining, time saving and a gem of a resource.

I have a situation I'd appreciate your view on however.  (I have done a thread search)

1) We are purchasing a flat from a private landlord with a tenant in situ (+5yrs), presumably now on periodic tenancy - obviously keen to keep and not unsettle
2) Landlord took over self management (coincidentally from our lettings agent who manages one of our other properties)
3) Neither party can find a copy of the original tenancy agreement
4) I have a copy of the Deposit protection certificate from the letting agent who originally let the property and who continues to hold the deposit
5) A direct DPC website check confirms deposit is held - although the copy certificate I have been emailed is unsigned by both parties does this matter?
6) I've asked both parties if the tenant could be asked if they have a copy of the original tenancy agreement
7) Our letting agent is recommending the outgoing landlord asks tenant to sign a new agreement ... but in reality why would I if I were the tenant?
There has been no rent revision in 5 years - where do we stand in this absent tenancy agreement situ ... 

What's the best move for this situation?

My concerns are :-

a) inheriting a tenant without seeing sight of the tenancy agreement they signed
b) creating a legal issue in doing this ie. no tenancy documentation = start date can't be confirmed, rent revisions, inventory etc)
c) if a new contract is issued by the current landlord it may not be of the standard of our other tenancy contracts
d) I'm trying to figure out where where else we might be exposed in terms of risk

Thanks everso 

Hi,
I wouldn't complete my purchase without having sight of a legitimate tenancy agreement that you are happy with.
If none materialise afterwards and the tenant chooses not to sign a new one what are you going to do.

Hi Debbie,

Bit of a tricky situation. Personally, I would get the tenant's to sign a new tenancy agreement that you would be happy with. Of course, that would mean discussing the situation with the current landlord/vendor.

Out of curiosity, is the letting agent also managing the sale of the property?

Stop!

Do not pass GO!

Time to sit back and let others do the work they should be doing... let them know that you'll not proceed until the things you want are in place.

Why make a rod for your own back?

If they're not willing to resolve what you see as fundamental issues, then there's probably more lurking underneath the surface. This gig can be hard enough without making hasty purchase decisions for 'non-optimum' properties. Don't be rash.

Don't throw away all the cards you hold by being understanding and accepting and relaxed and uncaring. You're correct that the current Tenant is under no obligation - whatsoever - to sign a new tenancy agreement (although they may not know that, whether you'd want to be underhand is an entirely different question). No rent increase in 5 years implies below market rate, right? Not good.

I walked away from a BTL purchase late last year... the vendor had started removing stuff from the house (stuff that was agreed as being included in the sale) saying to the Estate Agent - "he's only putting a Tenant in, he won't care"... well, I did, and I walked away, even after spending a few hundred on a Home Buyer Report. Don't ever feel you're too far down the line to exit (if you need to).

Awesome, you are all superstars ... and so quick thank you so much, so glad I reached out as my gut was telling me we have an issue.

Yes, letting agent is handling the sale and has suggested tying this in as an exchange condition, ie. exchange contracts subject to a new tenancy being created.  My view on that is I don't want to exchange without knowing what I'm exchanging on as it's my deposit on the hook!

Rent is 50-75 per month under market rate, but prob was over to start with, I can live with that for 6 months as ROI is still above 6% - but not indefinitely. (without docs I can't see options for changing :/)

So ... check me on this ... the ideal solution is to get current landlord to sign tenant to a new ?AST (of my standard) - would that be allowed in law given they've gone auto onto periodical? (feels like holding a gun to the head of the tenant?)
 
Pro's for me - that gives me 6 months and a window to re-align rent with current market,
Pro's for tenants - 6 months at same rent, no notice to quit
Con's for me - if tenant says no to new agreement current landlord's ?only option is revert to ?Section 21, which means a delayed purchase and/or cheesed off or lost tenant     
Pro's for tenant in signing new contract - uhm ...suggestions gratefully received on how the current landlord might position this ... although given this document trail I'm not holding out much hope
Con's for tenant not agreeing  - all parties will have to go for vacant possession to secure purchase - in which case current landlord might decide to take an offer privately and gazump me ... ho hum.

I'm pretty fair but spending 6 months in the USA and being nickel and dimed on everything I'm belt and braces on everything now. 

Gosh it feels weird to be a rookie  

Hi Debby,

Reason I asked if the letting agent's were handling the sale was because if that's the case, it's in their best interest to work for YOU. They want the sale, so they should be doing what they can to make you buy, and that means creating the optimum buying scenario for you!

I agree with what Hippo said, "let others do the work they should be doing"

Definitely don't exchange without knowing the T&C's of the tenancy agreement! You could be shooting yourself in the foot.

Yes, I would get the tenants to sign a new tenancy agreement that suits YOU! That's perfectly fair/legal, despite the fact it's periodic.

If the conditions are fair, the current landlord should have no objections, because he'll end up benefiting even if the sale falls through. The tenancy could reflect the new. higher rent, so you don't have to wait 6 months (that's why it could benefit the current landlord).

Pro for tenant is that you're a buyer that's willing to allow them to remain in property! Many prospective buyers will want the property for themselves (i.e. not a landlord), so the tenant would need to vacate. That would be a massive headache for them, especially since they have been there for 5+ years already!

Copy that, thanks everso, will keep you posted and let you know how it all pans out.  Fingers crossed. 

Quote from: DebbyC on March 30, 2015, 06:17:15 PMSo ... check me on this ... the ideal solution is to get current landlord to sign tenant to a new ?AST (of my standard) - would that be allowed in law given they've gone auto onto periodical? (feels like holding a gun to the head of the tenant?)

Or someone miraculously 'finds' the tenancy agreement and you digest it and are fine with it. Your original point 6) seems a good idea to me.